Gas vs electric: the cost of heat
| City | Gas rate | Gas heat | Electricity rate | Heat pump heat |
|---|---|---|---|---|
| Sydney | 4.95c/MJ | 20.96c/kWh | 33.14c/kWh | 9.47c/kWh |
| Melbourne | 4.16c/MJ | 17.64c/kWh | 31.98c/kWh | 9.14c/kWh |
| Brisbane | 6.16c/MJ | 26.09c/kWh | 27.97c/kWh | 7.99c/kWh |
| Adelaide | 7.02c/MJ | 29.72c/kWh | 41.91c/kWh | 11.97c/kWh |
| Canberra | 5.64c/MJ | 23.90c/kWh | 36.95c/kWh | 10.56c/kWh |
On these figures, heat from an efficient electric heat pump costs less than heat from gas in every capital. The existing cheapest way to heat a home guide compares heater types room by room.
What going all-electric involves
Hot water
A heat pump water heater replaces gas hot water. Discounts are available through STCs and state programs. See gas hot water costs.
Heating
Reverse-cycle split systems or ducted reverse-cycle replace gas heaters. See gas heater running costs.
Cooking
An induction cooktop replaces gas burners. See induction cooktop costs.
Close the gas account
Once nothing uses gas, ask your retailer to disconnect or abolish the connection so the supply charge stops. See disconnecting gas.
Replace at end of life
Swapping a working gas appliance rarely pays off quickly. Plan the switch so that each appliance is replaced with an electric one when it fails, and drop the gas connection once the last one goes.
When gas can still make sense
Gas may suit
Keep for now- Gas appliances are recent and working well
- Very cold climates where heat pump output drops on the coldest nights
- You cannot install outdoor units, for example in some apartments
Electric usually suits
Switch- An appliance needs replacing
- You have or plan rooftop solar
- Only cooking uses gas, so the supply charge is most of the bill
- You are in Victoria or the ACT, where gas is being phased out
Common questions
Per unit of energy, usually yes. Per unit of heat, an efficient heat pump or reverse-cycle air conditioner is usually cheaper, because it delivers several units of heat for each unit of electricity.
At least the daily supply charge, which is about $357 a year on a typical Melbourne gas plan and $276 in Sydney, as at 14 October 2026. Your electricity use will rise, so the net saving depends on your appliances.
When it needs replacing, usually yes. Running costs are typically lower, and reverse cycle also cools in summer.
Sources
Gas prices come from the AER plan data, priced by us. Electricity prices are the 2026-27 regulated rates. Efficiency figures are stated assumptions. Last checked October 2026. Prices include GST unless we say otherwise.